The Role of Marketing

1. Markets bring together bargainers and sellers of goods and services. In some cases, such as a topical anaesthetic fruit stall, buyers and sellers reach physically. In other cases, such as the stock merchandise, business asshole be transacted over the telephone, almost by remote control. We need non go into these details. Instead, we use a general definition of grocerys. 2. What the term market means A market is a shorthand expression for the bring by which households decisions well-nigh consumption of alternative goods, firms decisions about what and how to produce, and workers decisions about how much and for whom to work be all reconciled by adjustment of pricesPrices of goods and of resources, such as labour, machinery and land, adjust to ensure that scarce resources are used to produce those goods and services that edict demands. 4. Economics studies markets and prices Much of economics is devoted to the study of how markets and prices enable society to solve the pr oblem of what, how, and for whom to produce. approximate you buy a hamburger for your lunch. What does this have to do with markets and prices? You chose the caf because it was fast, convenient and cheap.Given your confide to take in, and your limited resources, the low hamburger price told you that this was a good agency to satisfy your appetite. You probably prefer steak but that is much expensive. The price of steak is soaring replete to ensure that society answers the for whom question about lunchtime steaks in favour of someone else. 5. The sellers viewpoint Now view about the sellers viewpoint. The caf owner is in the business because, precondition the price of hamburger meat, the rent and the wages that must be paid, it is hush up possible to sell hamburgers at a profit.If rents were higher, it might be to a greater extent profitable to sell hamburgers in a cheaper area or to stir to luxury lunches for rich executives on expense accounts. The student stooge the e cho is working there because it is a suitable part-time job which pays a bit of money. If the wage were much lower it would hardly be worthy working at all. Conversely, the job is unskilled and there are crapper of students looking for such work, so owners of cafes do not have to exsert very high wages. 6. Prices guide your decisionPrices are guiding your decision to buy a hamburger, the owners decision to sell hamburgers, and the students decision to take the job. Society is allocating resources meat, buildings, and labour into hamburger production done the price system. If nobody liked hamburgers, the owner could not sell enough at a price that covered the cost of running the caf and society would devote no resources to hamburger production. Peoples desire to eat hamburgers guides resources into hamburger production.However, if cattle contracted a disease, thereby reducing the deliverys ability to produce meat products, competition to purchase more scarce supplies of beef w ould bid up the price of beef, hamburger producers would be forced to raise prices, and consumers would buy more cheese sandwiches for lunch. Adjustments in prices would gain ground society to reallocate resources to reflect the increased scarcity of cattle. 7. We have select a general definition of markets There were several markets involved in your purchase of a hamburger. You and the caf owner were part of the market for lunches.The student behind the counter was part of the local labour market. The caf owner was part of the local wholesale meat market and the local market for rented buildings. These descriptions of markets are not very precise. Were you part of the market for lunches, the market for prepared food, or the market for sandwiches to which you would have turned if hamburgers had been more expensive? That is why we have adopted a very general definition of markets which emphasises that they are arrangements through which prices catch the allocation of scarce resou rces.